PAYE Tax Calculator Nigeria

How PAYE Tax Works in Nigeria

PAYE (Pay As You Earn) is the system used in Nigeria to deduct income tax directly from employees’ salaries. Employers are responsible for calculating and remitting this tax to the appropriate tax authority on behalf of employees.

PAYE is calculated using a progressive tax system, meaning different portions of your income are taxed at different rates. The higher your income, the higher the rate applied to additional income bands.

Nigerian PAYE Tax Structure (2026)

Under the current Nigerian tax structure, your chargeable income is calculated after deductions such as pension contributions and allowable reliefs. The remaining income is then taxed using progressive tax bands.

• First ₦800,000 → 0%
• Next portion → 15%
• Higher bands → up to 25%

This calculator automatically applies these rules to give you an accurate estimate of your PAYE tax.

Example PAYE Calculation

For example, if your annual salary is ₦7,200,000 and your pension contribution is ₦576,000:

• Your pension is deducted first
• The remaining income becomes your chargeable income
• Tax is applied progressively across income bands

This ensures that lower portions of your income are taxed at lower rates, while higher portions are taxed at higher rates.

Why Use This PAYE Calculator

This tool is built specifically for Nigeria, using current tax rules and deduction structures. It helps employees, freelancers, and professionals estimate their tax obligations quickly and accurately.

It is useful for salary planning, job comparisons, budgeting, and understanding how much tax you pay monthly and annually.

Frequently Asked Questions